On May 30, the Ministry of Finance further expanded the scope of the Emergency Credit Line Guarantee Scheme (ECLGS) amid the economic disruption caused by the second wave of the Covid-19 pandemic. In effect, this means that the government has extended the scope of the ECLGS to Rs 3 lakh crore to cover loans of up to Rs 2 crore for setting up on-site oxygen production plants in healthcare facilities .
In a statement released by the Ministry of Finance on May 30, under ECLGS 4.0, 100% guarantee coverage will be extended to loans of up to Rs 2 crore made to clinics, hospitals, nursing homes and faculties of medicine for the establishment of on-site oxygen production plants. “The interest rate has been capped at 7.5% for the same,” the statement said.
“Borrowers who are eligible for restructuring as per the RBI guidelines of 05 May 2021 and who have been availed of loans under “ECLGS 1.0” with an aggregate tenor of four years including interest only repayment during the 12 first months with repayment of principal and interest in 36 months after, will now be able to benefit from a five-year term for their ECLGS loan, i.e. repayment of interest only for the first 24 months with repayment of principal and interest within the next 36 months,” the statement from the Ministry of Finance said.
The current ceiling of Rs 500 crore of outstanding loan for eligibility under “ECLGS 3.0” will be removed, subject to maximum additional ECLGS assistance to each borrower being limited to 40% or Rs 200 crore of rupees (whichever is lower), the finance ministry added.
The Ministry of Finance also clarified that the civil aviation sector is now eligible under “ECLGS 3.0”.
“The latest changes to the ECLGS would enhance its usefulness and impact by providing additional support to MSMEs, safeguarding livelihoods and contributing to the seamless resumption of business activity. These changes will further facilitate the flow of credit institution on reasonable terms,” he added.
Meanwhile, in Mumbai, State Bank of India (SBI) Chairman Dinesh Khara and Indian Banks Association (IBA) Chairman Rajkiran Rai made a number of announcements on May 30, including the extension of the validity of the ECLGS until September 30, 2021, or until guarantees in the amount of Rs 3 lakh crore are issued.
How can customers approach banks for resolution? IBA said customers can file an application on the bank’s website portal. “Clients can do manual submission of the request at the branch level for processing the request and implementing it into the system,” it was explained.